LONDON -- The global recession has now passed its nadir but the financial crisis still has some time to run and it will be a year at least before banks start lending again in earnest, a Reuters poll showed on Wednesday.
The survey of analysts from across Europe and the United States between July 20 and 22 found 52 of 76 saying that a bottom had already been hit in the global recession, compared to just 28 of 65 in an April poll.
The findings come on the back of more upbeat news and a rally in world equity markets on hopes of a recovery from the worst recession and financial crisis since the early 20th century, however slow that recovery may be.
"Leading indicators as well as some hard facts suggest that the worst is over and that the industrial countries are close to the beginning of a moderate economic recovery," said Fabienne Riefer at Deutsche Postbank.
In the most recent poll that did not think the bottom had been hit, the vast majority said it would be reached before the end of this year.
Meanwhile, 37 of 75 economists said the financial crisis that began in August 2007 and has battered economies since, will run for another 6 to 12 months, with 24 saying it would rumble on for at least another year. Only 14 said it would be over in 3 to 6 months.
Federal Reserve Chairman Ben Bernanke said on Tuesday the outlook for the long-suffering U.S. economy was improving while separate Reuters polls showed economists believe the euro zone economy will be flat this quarter while the British one will see scant growth.
Global gross domestic product is seen contracting 1.5 percent this year but will be pulled back to growth in 2010 by a strong boost from Asia.
"It would be naive to think that one of the deepest and sharpest contractions in the history of the global economy can be turned around too quickly, even given the amount of extra liquidity that has been flushed down the system," said Stuart Bennett at Calyon.
Central banks around the world have slashed interest rates to rock bottom and offered unlimited lending to banks but economists think it will be some time before lending to businesses and households picks up.
Forty-four of 70 economists said it would be at least a year before the banks begin lending again in earnest while 23 said they would within six to 12 months. Just three said banks would step up lending in 3-6 months.
The Fed has lowered benchmark overnight rates to near zero and pumped more than $1 trillion into financial markets to counter the worst banking crisis since the Great Depression and one of the most severe recessions in decades and this is probably enough.
Economists were virtually unanimous in saying that the U.S. government did not need to arrange another stimulus package for the recovery to take hold, with 70 of 76 saying it was unnecessary.
"Stimulus is not required in the long term and will not have an effect in the short term," said Trevor Williams at Lloyds
Bernanke said on Tuesday the huge amounts of money the U.S. central bank has pumped into the economy would not undercut its ability to push borrowing costs higher when the time was ripe, but a Reuters poll showed U.S. rates on hold into next year.
"Accommodative policies will likely be warranted for an extended period," Bernanke wrote in the article published on the Wall Street Journal's web site this week.
"At some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road."
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